May 16, 2013

4 Latest Loyalty Marketing Strategies Marketers have been manufacturing consumer loyalty through rewards and loyalty programs since the 1970s. The average American belongs to seven programs and 7 out of 10 are willing to join more programs. Most of us sign up for rewards from airlines, credit cards, grocery stores, gas stations, favorite retailers and a hotel chain or car rental firm. A third of most programs have members who have defected in-place without formally cancelling. Forty seven percent of respondents stopped participating in one of their programs in the last year. And yet in spite of competition and attrition, fifty-seven percent of respondents say they modify when and where they buy to maximize loyalty benefits. Forty-six percent say their choice of brands is a function of optimizing reward value. Loyalty marketing is personal, fickle, schizophrenic and well worth doing. Building and sustaining loyalty is tricky. Its part stimulus-and-response conditioning, part value exchange and part emotion or experience driven brand love. The dynamic mix of these rational and irrational elements in the context of larger macro economic factors, like a recession, or micro factors, like an awful experience with a store clerk, can change quickly. What looks valuable today; is piddling tomorrow. Too often the experience of trying to redeem points or miles is so frustrating, infuriating or just plain unfair that it destroys the rationale for collecting them. On the other hand a free trip, automatically applied coupons or discounts that yield free groceries or a first class upgrade can be sublime. Enter Maritz Loyalty Marketing who recently published its first US Loyalty Marketing Report, under the leadership of Scott Robinson and Bob Macdonald. They surveyed more than 6000 people in 30 national loyalty programs across six industry sectors. Here are the 4 key drivers of loyalty program satisfaction they discovered. Relevant Communication is Critical. Duh! While more than 9 out of 10 members want to hear from their loyalty programs only half (53%) see the communications are relevant. Fifty-seven percent of members read everything they get from their rewards programs while just 12% say it’s too much. Everybody wants to know the rules, the news and what’s in it for me. Duplicate Channels. Almost all participants (96%) want communication and almost half (46%) want it in at least three channels. Seventy-three percent want their mobile device to interact with their loyalty programs. But only a third (37%) see mobile as their primary loyalty channel. These are the people most likely to download loyalty apps. Loyalty loyalists want their communications on their terms and they want a choice of access points that they direct. Finesse the Cool-to-Creepy Spectrum. Sixty nine percent like and want personalized offers based on purchasing habits. These are the “do it for me” people. Sixty-two percent prefer to drive themselves. They want offers based on preferences that they manage. Both groups want rewards earned and applied to the stuff their care about most. Some consumers feel understood and appreciated when offers are based on their attitudes or behaviors. Others are entirely creeped out by the experience. Loyalty marketers need to segment participants to find the right balance and test the information-for-value exchange to determine consumers tolerances. More than a quarter (29%) of participants think programs require or acquire too much information prompting privacy concerns. There’s a built-in paradox here. If program satisfaction is a function of relevance and data collection drives relevance; without data you are doomed. If you don’t collect and use the data, you risk developing programs and content that nobody cares about. That’s probably why in spite of generalized privacy concerns a majority of Americans still trade personal information for relevant offers. Don’t Discount Values. On some level, loyalty is about brand awareness, preference and advocacy. Don’t let CRM tactics fool you. There is a strong link between personal values and brand values. Forty percent of those surveyed see their favorite brand’s values as “the same as mine.” People who see themselves in alignment with a brand’s values are much more satisfied with loyalty programs. This is classic branding strategy. Successful brands mirror image the personality, values, voice and tonality of their best customers. Loyalty marketing needs to focus much more on content and messaging to resonate with program participants. Its probably time to let consumers into the tent and ask them to co-create content and tactics that reflect who they are and what they believe in. In a plugged-in, on-the-go, ADD society, loyalty is a constantly shifting bogey. Yet this new data offers some insights, approaches...
5 Key Mobile Marketing Moves Mobility will turn us into direct, relationship and database marketers.That’s the cornerstone message from two new studies -- Forrester’s “2013 Mobile Trends for Marketers” and Urbanairship’s “Connect with the Connected.” The keys to successfully making this transformation will be surrendering control to consumers while continuously creating relevant and resonant content. Let’s start with a few key facts. Mobile is here. By the end of the year half of all Americans will have smartphones.Most brand and marketers know this but haven’t put either strategy or infrastructure in-place. Mobility changes almost everything. Smartphones have replaced PCs, watches, rolodexes, maps, cameras, game devices, remote controls, landlines, books, boarding passes, coupons and loyalty cards. And they are closing in on wallets. People spend as much time with their phones as they do with TV. Smartphones are an appendage for younger consumers. They are their phones, which are very personal, heavily customized and in constant use. Don’t be surprised if Levi’s or Lees creates jeans with a special quick-draw phone pocket, which also prevents inadvertent butt dialing. Apps are “hit” driven. There are millions of them. They rise into and fall out of fashion as quickly as the Top 40. The average person has 40 on their phone but only really uses 8-10. Getting onto a consumer’s phone is tough. Staying on is even tougher. A successful app must either provide instant utility or repeatable entertainment. Open beats closed systems. Android is ascendant and will continue to be because it’s becoming ubiquitous. Apple may have a few tricks up its sleeve, but bet on Android, and many variations of Android, across devices and geographies to ultimately dominate. Soon apps and native phone technologies will work together and talk to each other. Think about how interoperability might impact your business. For example, the accelerometer notices you are walking funny and double checks with the pedometer. The GPS pipes up and says you’re off course on your way home. The med app then quickly checks your heart rate and blood pressure, and then signals the Walgreen’s app to reorder your meds. Context Matters. Where you are (location) and what you’re doing (attention) determine your mood and your openness to brands. “ Your customer is not the same person when they wake up as when they are working mid-day – each persona has different needs and desires.” Americans are putting computers in their pockets and expecting them to work and add value on-demand. Brands have to ask themselves, “ Are you interrupting them or making life a little better?” To the extent that consumers use your app, you have an always-on virtual private network (VPN) connection to them. You have to respect this, insure privacy and use it sparingly. There is great opportunity for first movers to claim mind and heart space and an equal opportunity to frustrate, annoy and alienate. When you’re in, you’re in till you blow it. When you’re out; you’re out for good. The implications of these facts are staggering and challenging, especially for brands used to dominating their category, setting the product or sales agenda or deciding the communications cadence to their customers. In order to harness mobility, brands must master these 5 moves. Think Differently. Forrester put it this way. “In 2013, the ultra-connected consumer base will continue to grow at a staggering pace, destabilizing marketing as you’ve come to know it. These customers demand personalized, relevant attention, designed around their needs and wants rather than around your marketing channels. If you don’t change the way you think about engaging these customers, you will quickly lose relevance.” Surrender Control. Interested and loyal customers prefer to drive the relationship. Enable them to set preferences for all aspects of their interactions with the brand. Let them tell you how often they want to hear from, what channels they prefer and which products or services they care about most. Ask permission to use location, purchase history and other data to customize their experiences. The guys at Urbanairship point out the marketing paradox. “When customers have the control to customize and limit a brand’s messages, they become more engaged. Less is more. Brands that focus on relevance over reach and value over frequency build enduring relationships and outpace the competition.” Target Context. Think about lifestyles, life stages, time of day and the customer journey with a UX and a service-oriented mindset. Smartphones and tablets are used to do distinct tasks – check an account, make a payment, find directions, grab a coupon, research a restaurant, compare...

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

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